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The harm done is far It is submitted that the principle in each case is the same. from being exhausted by the immediate damage, and responsibility for ulterior injury rests on those responsible for the primary wrong.
There is a further consideration. It was recognized to be in the power of the Oil Syndicate to so arrange taxation as to work a preferential rate in its own favour, to the detriment of competitive traders. By parity of reasoning, to exclude consequential damages in the case of the "Sainam would be to leave Chinese ship-owners free to destroy, whenever desirable, by suborned piratical attack the competitive advantage of superior safety, hitherto believed to be inherent in the British flag, at a foreknown cost of a few (e.g., fifteen) thousand dollars.
The Companies have had, as expressed in their statement of claim, since they began running vessels on the West River in 1897, "to meet severe competition from native-owned vessels which, chiefly by reason of their lower running expenses, have been able to trade profitably at rates with which the Companies could not compete. The consequence was that the trade was carried on until about a year ago at a heavy, though gradually decreasing, annual loss. For the last year receipts and expenses have almost exactly balanced, and the Companies were expecting in the immediate future an adequate return for the sacrifices they had made to obtain the trade. The main reason for the measure of success attained was not a diminution of competition, which is as keen as ever, but the security that the Companies had been able to afford their patrons. For years past all the waterways leading to Canton have been more or less infested with pirates, and native craft of all kinds have been ruthlessly " Now plundered, but the Companies' steamers had been immune from attack.” the very foundation of that success had been shaken," and their business has been affected in all its branches.
The vessels had been designed and fitted with a view to creating a foreign tourist passenger traffic, which was universally considered as being safe under the British flag; but the recent attack on the "Sainam" has completely destroyed this feeling of security, with the result that foreign passengers have almost entirely ceased to travel on the Company's West River steamers.
It is undeniable that there are here involved pecuniary considerations much greater than 15,000 dollars, or even 150,000 dollars. It is equally undeniable that the responsibility of the Chinese authorities is implicit for allowing piracy to prevail.
It is significant, for instance, that "the attack took place in a reach of the river so well known as a haunt of pirates that native boats will not navigate it at night' so well known, in fact, to require protection that it was formerly patrolled by armed steam-boats, but the authorities withdrew them some six months previous to the outrage! The fact tends to confirm, if it needed confirmation in the mind of any one familiar with the conditions, the contention of our Hong Kong branch, that "it is only through the agency of pecuniary punishment that they can be made to feel the unpleasant consequences of the parsimonious policy which is at the root of the evil. They will employ the needful men and provide the necessary funds only when the conviction has been brought home to them that this is, in the long run, a more economical method of dealing with piracy than the present more immediately lucrative method of pocketing the money required to put it down.”
The conviction expressed in the Association's letter of the 1st August last, may be repeated, that "piracy could be put down in Kwangtung, as it has been put down elsewhere, by honest and resolute action. If the local authorities willed the end, and were not deterred by jealousy of foreigners from employing the method, a British naval officer authorized to organize, control, and inspire a sufficient force, even of Chinese police, with sufficient aud appropriate craft for river service, might be relied on to produce order within twelve months,"
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It has been noted with gratification that His Majesty's Government have urged this view upon the Chinese. It has been noted without surprise that it has been repelled. will not be till the authorities are made to feel the inconvenience of direct responsibility for the full consequence of outrages due to their faches, that improved conditions will be produced.
The conclusion of our Hong Kong branch is that refusal to support a claim of the nature in question "would provide the Chinese with a precedent dangerous in the extreme, because seemingly based upon the assumption that the flag can be grossly violated without any loss to the Government directly responsible, other than that entailed by being called upou to pay a paltry bill of repairs, and some small compensa- tion for lives lost or ruined "a precedent which would, moreover,
" operate seriously to the detriment of the prospects of British trade on the West River, and be
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hailed, no doubt, with satisfaction by those unfriendly officials whose desire is to discourage it."
The Hong Kong Chamber of Commerce express themselves in the same sense- that the "attitude (of hesitation) taken up by His Majesty's Government in this matter will tend to the continuance and encouragement of similar outrages, and have a disastrous influence on British trade."
The experience of the Association will assuredly lead it to indorse those views; and I have shown that it can appeal to precedent in their support.
(Signed) R. S. GUNDRY, President.
China Association, 159, Cannon Street, London,
(Extract.)
January 12, 1907.
Inclosure 2 in No. 1.
Owners of "Sainam" to China Association (Hong Kong Branch),
November 17, 1906. OUR claim for consequential damages was not made without careful consideration. It was, first of all, based upon the opinion of the owners that great injury had been done to a trade which they had pioneered at great loss, and which had just begun to show signs of giving some return. This has been borne out by our experience since the outrage in several ways, rendering our position seriously injured and more difficult, and from the following causes :-
Their The owners'
1. The difficulty of now retaining masters, officers, and crew on the line, dislike to the employment, because of the risks attendant thereto. consequent expense of meeting such a situation. Captain Joslin, who was in command of the "Sainam" at the time of the piracy, has since had to be sent home suffering from illness pointing to a breakdown of his nervous system.
2. The great decrease in foreign passenger traffic-only those who are forced by circumstances to travel do so now; tourists from oversea and Hong Kong residents avoid the West River.
3. The general arrest of the trade. It was a gradually increasing quantity up to the time of the piracy, since then it has become stationary, this can be proved by figures. When the prosperity of a trade which is only in its infancy and expanding is suddenly interrupted and we can point to the immediate cause, surely we have good reason for claiming reparation.
us to 4. The insecurity of life and property on the West River which causes maintain a staff of watchmen on the steamers--an expense incurred solely because the Chinese Government, through maladministration, are unable to control their people.
5. The serious handicap to what should be a flourishing and lucrative trade, restricted at every point by the gross persistent indifference and carelessness of the Chinese Government, acting in violation of all Treaty obligations, causing serious loss to those who have spent large sums of money in trying to develop the trade, relying on the good faith of both British and Chinese Government.
Inclosure 3 in No. 1.
Extract from the "North China Heroid” of November 2, 1906.
THE NEW NAVY OF CHINA.
AT a recent Conference between his Highness Prince Ching and Viceroy Yuan Shih-kai at Peking, touching the creation of a modern navy, the reorganization of which shall be proceeded with puri passu with the reorganization of the Imperial armies, it was agreed to devote the greater portion of the money annually appropriated in each province towards the maintenance of the various inland waters and coastal navies to the
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